22662 Federal Register / Vol. 76, No. 78 / Friday, April 22, 2011 / Proposed Rules 

(3) Exclusion. A bridge financial 

company chartered pursuant to 

12 U.S.C. 5390(h) shall not be deemed 

to be a Covered Company hereunder. 

(f) Critical operations means those 

operations of the Covered Company, 

including associated services, functions 

and support, that, in the view of the 

Covered Company or as jointly directed 

by the Board and the Corporation, upon 

a failure of, or discontinuance of such 

operations, would likely result in a 

disruption to the U.S. economy or 

financial markets. 

(g) Depository institution has the same 

meaning as in section 3(c)(1) of the 

Federal Deposit Insurance Act 

(12 U.S.C. 1813(c)(1)) and includes a 

state-licensed uninsured branch, 

agency, or commercial lending 

subsidiary of a foreign bank. 

(h) Foreign banking organization 

means: 

(1) A foreign bank, as defined in 

section 1(b)(7) of the International 

Banking Act of 1978 (12 U.S.C. 3101(7)), 

that: 

(i) Operates a branch, agency, or 

commercial lending company 

subsidiary in the United States; 

(ii) Controls a bank in the United 

States; or (iii) Controls an Edge 

corporation acquired after March 5, 

1987; and 

(2) Any company of which the foreign 

bank is a subsidiary. 

(i) Functionally regulated subsidiary 

has the same meaning as in section 

5(c)(5) of the Bank Holding Company 

Act, as amended (12 U.S.C. 1844(c)(5)). 

(j) Material entity means a subsidiary 

or foreign office of the Covered 

Company that is significant to the 

activities of a critical operation or core 

business line (as defined in this part). 

(k) Material financial distress with 

regard to a Covered Company means 

that: 

(1) The Covered Company has 

incurred, or is likely to incur, losses that 

will deplete all or substantially all of its 

capital, and there is no reasonable 

prospect for the company to avoid such 

depletion; 

(2) The assets of the Covered 

Company are, or are likely to be, less 

than its obligations to creditors and 

others; or 

(3) The Covered Company is, or is 

likely to be, unable to pay its obligations 

(other than those subject to a bona fide 

dispute) in the normal course of 

business. 

(l) Nonbank financial company 

supervised by the Board means a 

nonbank financial company or other 

company that the Council has 

determined under section 113 of the 

Dodd-Frank Act (12 U.S.C. 5323) shall 

be supervised by the Board and for 

which such determination is still in 

effect. 

(m) Rapid and orderly resolution 

means a reorganization or liquidation of 

the Covered Company (or, in the case of 

a Covered Company that is incorporated 

or organized in a jurisdiction outside 

the United States, the subsidiaries and 

operations of such foreign company that 

are domiciled in the United States) 

under the Bankruptcy Code that can be 

accomplished within a reasonable 

period of time and in a manner that 

substantially mitigates the risk that the 

failure of the Covered Company would 

have serious adverse effects on financial 

stability in the United States. 

(n) Significant bank holding company 

has the meaning given such term by rule 

of the Board pursuant to section 

102(a)(7) of the Dodd-Frank Act, 

12 U.S.C. 5311(a)(7). 

(o) Significant company means a 

significant bank holding company or a 

significant nonbank financial company. 

(p) Significant nonbank financial 

company has the meaning given such 

term by rule of the Board pursuant to 

section 102(a)(7) of the Dodd-Frank Act, 

12 U.S.C. 5311(a)(7). 

(q) Subsidiary means a bank or other 

company that is controlled by another 

company and an indirect subsidiary is 

a bank or other company that is 

controlled by a subsidiary of a company. 

By order of the Board of Governors of the 

Federal Reserve System, April 8, 2011. 

Jennifer J. Johnson, 

Secretary of the Board. 

Dated at Washington, DC, this 29th day of 

March 2011. 

By order of the Board of Directors. 

Federal Deposit Insurance Corporation. 

Robert E. Feldman, 

Executive Secretary. 

[FR Doc. 2011–9357 Filed 4–21–11; 8:45 am] 

BILLING CODE 6210–01–P 

FEDERAL RESERVE BOARD 

12 CFR Chapter II 

[Docket No. OP–1416] 

Notice of Intent To Apply Certain 

Supervisory Guidance to Savings and 

Loan Holding Companies 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Notice of intent and request for 

comments. 

SUMMARY: The Board of Governors of the 

Federal Reserve System (‘‘Board’’) 

invites comment on its intention to 

apply certain elements of its 

consolidated supervisory program 

currently applicable to bank holding 

companies to savings and loan holding 

companies (‘‘SLHCs’’) after assuming 

supervisory responsibility for SLHCs in 

July 2011. The Dodd-Frank Wall Street 

Reform and Consumer Protection Act of 

2010 transfers supervisory functions 

related to SLHCs and their nondepository subsidiaries to the Board on 

July 21, 2011. 

DATES: Comments must be submitted on 

or before May 23, 2011. 

ADDRESSES: You may submit comments 

by any of the following methods: 

• Agency Web Site: http:// 

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: 

regs.comments@federalreserve.gov. 

Include docket number in the subject 

line of the message. 

• FAX: 202/452–3819 or 202/452– 

3102. 

• Mail: Jennifer J. Johnson, Secretary, 

Board of Governors of the Federal 

Reserve System, 20th Street and 

Constitution Avenue, NW., Washington, 

DC 20551. 

All public comments are available 

from the Board’s Web site at http:// 

www.federalreserve.gov/generalinfo/ 

foia/ProposedRegs.cfm as submitted, 

unless modified for technical reasons. 

Accordingly, your comments will not be 

edited to remove any identifying or 

contact information. Public comments 

may also be viewed electronically or in 

paper form in Room MP–500 of the 

Board’s Martin Building (20th and C 

Streets, NW.) between 9 a.m. and 5 p.m. 

on weekdays. 

FOR FURTHER INFORMATION CONTACT: 

Kathleen O’Day, Deputy General 

Counsel, (202–452–3786), or Amanda K. 

Allexon, Counsel, (202) 452–3818, Legal 

Division; Anna Lee Hewko, Assistant 

Director, (202) 530–6260, T. Kirk 

Odegard, Manager, (202) 530–6225, or 

Kristin B. Bryant, Supervisory Financial 

Analyst, (202) 452–3670, Division of 

Banking Supervision and Regulation, 

Board of Governors of the Federal 

Reserve System, 20th and C Streets, 

NW., Washington, DC 20551. 

Telecommunications Device for the Deaf 

(TDD) users may contact (202–263– 

4869). 

SUPPLEMENTARY INFORMATION: 

Background 

The Dodd-Frank Wall Street Reform 

and Consumer Protection Act of 2010 


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1The Board’s consolidated supervision program 

is set forth in SR letter 08–9/CA letter 08–12, 

‘‘Consolidated Supervision of Bank Holding 

Companies and the Combined U.S. Operations of 

Foreign Banking Organizations’’ (SR 08–9). This 

guidance is currently being reviewed pursuant to 

changes in the Board’s supervisory responsibilities 

as set forth in the Dodd-Frank Act, including those 

that apply to the supervision of SLHCs. 

2 ‘‘Continuous monitoring activities’’ are 

supervisory activities primarily designed to develop 

and maintain an understanding of the organization, 

its risk profile, and associated policies and 

practices. These activities also provide information 

that is used to assess inherent risks and internal 

control processes. Such activities include meetings 

with banking organization management; analysis of 

management information systems and other internal 

and external information; review of internal and 

external audit findings; and other efforts to 

coordinate with, and utilize the work of, other 

relevant supervisors and functional regulators 

(including analysis of reports filed with or prepared 

by these supervisors or regulators, or appropriate 

self-regulatory organizations, as well as related 

surveillance results). 

3A discovery review is an examination/ 

inspection activity designed to improve the 

understanding of a particular business activity or 

control process, for purposes such as addressing a 

knowledge gap that was identified during the risk 

assessment process. 

4See SR letter 02–1, ‘‘Revisions to Bank Holding 

Company Supervision Procedures for Organizations 

with Total Consolidated Assets of $5 Billion or 

Less’’ (SR 02–1). See also Federal Reserve 

Regulatory Service (FRRS) 3–1531 (S–2483, October 

7, 1985, as revised by S–2563, May 20, 1994) and 

FRRS 3–1532.5 (S–2587, November 3, 1997). SR 

02–1 also sets forth procedures for BHCs with total 

consolidated assets of between $1–$5 billion, but 

these institutions are not considered to be small 

shell BHCs. 

5The determination of whether a holding 

company is ‘‘complex’’ versus ‘‘noncomplex’’ is 

made at least annually on a case-by-case basis 

taking into account and weighing a number of 

Continued 

(the ‘‘Dodd-Frank Act’’) was enacted into 

law on July 21, 2010. Title III of the 

Dodd-Frank Act abolishes the Office of 

Thrift Supervision (‘‘OTS’’) effective July 

21, 2011, and transfers supervisory 

functions (including rulemaking) related 

to SLHCs and their non-depository 

subsidiaries to the Board. The Board 

will become responsible for the 

supervision of SLHCs beginning July 21, 

2011(‘‘transfer date’’). 

The Board believes that it is important 

that any company that owns and 

operates a depository institution be held 

to appropriate standards of 

capitalization, liquidity, and risk 

management consistent with the 

principles of safety and soundness. As 

a result, it is the Board’s intention, to 

the greatest extent possible taking into 

account any unique characteristics of 

SLHCs and the requirements of the 

Home Owners Loan Act (‘‘HOLA’’), to 

assess the condition, performance, and 

activities of SLHCs on a consolidated 

risk-based basis in a manner that is 

consistent with the Board’s established 

approach regarding bank holding 

company (‘‘BHC’’) supervision. As with 

BHCs, our objective will be to ensure 

that the SLHC and its nondepository 

subsidiaries are effectively supervised 

and can serve as a source of strength for, 

and do not threaten the soundness of, its 

subsidiary depository institutions. 

The Board has identified three 

elements of its current supervisory 

program that are particularly critical to 

the effective evaluation of the 

consolidated condition of holding 

companies: (i) The Board’s consolidated 

supervision program for large and 

regional holding companies; (ii) the 

Board’s supervisory program for small, 

noncomplex holding companies; and 

(iii) the Board’s holding company rating 

system. The Board believes that these 

programs aid in the effective 

supervision of BHCs and that they 

would be equally effective for the 

supervision of SLHCs. 

It is the Board’s intention that, after 

the transfer date, the Board will issue 

formal guidance or notices of proposed 

rulemaking, as appropriate, taking into 

consideration any comments received 

on this notice, to apply the supervisory 

program in place for BHCs to SLHCs to 

the fullest extent possible taking into 

account the unique characteristics of 

SLHCs and the requirements of HOLA 

in order to ensure continuous and 

effective supervision of SLHCs. By this 

notice, the Board seeks to inform 

interested persons, including SLHCs, 

about the Board’s approach to 

supervision and invites comment on its 

intended approach in order to help 

identify issues and matters that may 

require special attention. 

Consolidated Supervision 

Consistent with its responsibilities 

under the Bank Holding Company Act, 

the Gramm-Leach-Bliley Act, and the 

Dodd-Frank Act, the Board supervises 

BHCs on a consolidated and enterprisewide basis.1 The consolidated 

supervision program, which applies 

primarily to large and regional BHCs, is 

aimed at understanding and assessing 

the BHC on a consolidated basis. The 

program is applied in a risk-focused 

manner, and supervisory activities 

(continuous monitoring,2 discovery 

reviews,3 and testing) vary across 

portfolios of institutions based on size, 

complexity, and risk. The framework 

provides for coordination by the Federal 

Reserve System with, and reliance on 

the assessments by, bank and functional 

regulators of BHC subsidiaries. The 

consolidated supervision program is not 

only central to the Board’s assessment of 

risk to individual banking organizations 

and their depository institution 

subsidiaries, but also to the Board’s 

assessment of the stability of the broader 

financial system. 

The Board believes that applying the 

BHC consolidated supervision program 

to SLHCs is essential to executing its 

supervisory responsibilities under the 

Dodd-Frank Act and is consistent with 

the authorities provided by HOLA. 

While the Board’s BHC consolidated 

supervision program has some 

similarities to the current supervisory 

program employed by the OTS, the 

Board nevertheless believes that the 

Board’s consolidated supervision 

program may entail more intensive 

supervisory activities than under 

current OTS practice, at least for some 

SLHCs. For example, the Board’s 

consolidated supervision of SLHCs may 

entail more rigorous review of internal 

control functions and consolidated 

liquidity, as well as the conduct of 

discovery reviews of specific activities. 

In addition, the Board’s supervisory 

program may entail heightened review 

of the activities of nonbank subsidiaries 

(consistent with applicable law and 

regulation) and may entail greater 

continuous supervisory monitoring of 

larger SLHCs. Nevertheless, the Board 

does not believe that application of its 

BHC consolidated supervision program 

to SLHCs would require any specific 

action on the part of SLHCs prior to the 

transfer date or cause undue burden on 

an ongoing basis. 

The Board intends to integrate each 

SLHC into existing programs that align 

institutions with various supervisory 

portfolios (e.g., community banking 

organizations, regional banking 

organizations, and large banking 

organizations) based on their size and 

complexity. Each portfolio has a 

supervisory program tailored to the type 

of institution supervised. The applicable 

consolidated supervision program is 

explained in SR 08–9. 

Small, Noncomplex Holding Companies 

Consistent with a risk-focused 

approach to supervision, both the Board 

and OTS have tailored specific 

supervisory programs for holding 

companies that are viewed as posing a 

relatively low level of risk to depository 

institution subsidiaries and to the 

financial system. The OTS currently 

classifies low-risk or noncomplex 

SLHCs (irrespective of size and as 

determined by supervisory staff on a 

case-by-case basis) as ‘‘Category I’’ and 

subjects these SLHCs to abbreviated, 

limited-scope onsite examinations. 

Similarly, the Board has a program for 

BHCs with total consolidated assets of 

$1 billion or less (‘‘small shell BHCs’’).4

For noncomplex 5 small shell BHCs 


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considerations, such as: The size and structure of 

the holding company; the extent of intercompany 

transactions between insured depository institution 

subsidiaries and the holding company or uninsured 

subsidiaries of the holding company; the nature and 

scale of any nonbank activities, including whether 

the activities are subject to review by another 

regulator and the extent to which the holding 

company is conducting Gramm-Leach-Bliley 

authorized activities (e.g., insurance, securities, 

merchant banking); whether risk management 

processes for the holding company are 

consolidated; and whether the holding company 

has material debt outstanding to the public. 

6Targeted inspection activities typically focus 

intensively on one or two activities. 

7A limited-scope inspection typically reviews all 

areas of activity covered by a full-scope inspection, 

but less intensively. 

8Requirements for BHCs with special 

characteristics (e.g., those that are formed to acquire 

an existing bank, have undergone a change in 

control, or are de novo and have been organized to 

acquire a de novo bank) may differ from the 

guidelines described here. See section 5000 of the 

Federal Reserve Board’s Bank Holding Company 

Supervision Manual. 

9See Holding Companies Handbook, Office of 

Thrift Supervision, March 2009. See also OTS CEO 

Letter 266 (December 20, 2007) and 72 FR 72442 

(2007). 

10See Board Supervision and Regulation (SR) 

letter 04–18, ‘‘Bank Holding Company Rating 

System,’’ and 69 FR 70444 (2004). 

11The OTS does not require individual 

component ratings to be assigned to noncomplex 

and low-risk holding companies. 12A simplified version of the rating system that 

includes only the risk management component and 

a composite rating is applied to noncomplex BHCs 

with assets of $1 billion or less. 

13Although liquidity is not rated separately under 

the CORE system, it is nevertheless taken into 

account in both the organizational structure and 

earnings components. 

where all subsidiary depository 

institutions have satisfactory composite 

and management ratings, and where no 

material outstanding holding company 

or consolidated issues are otherwise 

indicated, a Reserve Bank generally 

assigns only a composite rating and a 

management rating to the BHC and 

bases those ratings on the ratings of the 

lead depository institution (i.e., no 

onsite work is typically undertaken). 

For complex small shell BHCs, and for 

noncomplex small shell BHCs that do 

not meet the additional conditions 

noted in the previous sentence, a 

Reserve Bank generally conducts an 

offsite review, with targeted onsite 

review as necessary.6

For a noncomplex BHC with total 

consolidated assets between $1–$10 

billion and a satisfactory composite 

rating, a limited-scope 7 onsite 

inspection is required every two years 

(in the case of BHCs with assets between 

$1–$5 billion, a targeted inspection is 

acceptable as well). For a complex BHC 

with total consolidated assets between 

$5–$10 billion and a satisfactory 

composite rating, a full-scope onsite 

inspection is required annually (in the 

case of BHCs with assets between $1–$5 

billion, this requirement may be 

satisfied with a limited-scope or 

targeted review for the onsite portion of 

the inspection, supplemented by other 

information sources). 

For a noncomplex BHC with total 

consolidated assets between $1–$10 

billion and a less-than-satisfactory 

composite rating, irrespective of 

complexity, at least one full-scope 

onsite inspection and one limited-scope 

or targeted inspection are required 

annually. In the case of BHCs with 

assets between $1–$5 billion, the 

requirement for an annual full-scope 

inspection may be satisfied with a 

limited-scope or targeted inspection for 

the onsite portion, supplemented by 

other inspection sources. 

For all BHCs with total consolidated 

assets greater than $1 billion (i.e., those 

that are not considered small shell 

BHCs), complete ratings are assigned in 

conjunction with inspection activities. 

Moreover, additional limited-scope or 

targeted inspection activities may be 

conducted as needed.8

Once Board supervisory staff has 

become familiar with the structure and 

financial condition of SLHCs, the Board 

intends to apply the program for small 

shell BHCs as set forth in SR 02–1 and 

supporting documents to SLHCs that 

meet the same criteria. A Reserve Bank 

will determine whether an SLHC with 

assets of $1 billion or less is complex or 

noncomplex, and will tailor its 

supervision as appropriate. For a 

number of small, noncomplex SLHCs, 

this may have the effect of reducing 

burden as onsite examinations/ 

inspections will no longer be required. 

Holding Company Rating System 

The Board and OTS (together, the 

‘‘agencies’’) have developed rating 

systems for supervised institutions to 

provide an assessment of financial and 

nonfinancial factors based on the 

findings from examination and 

inspection activities, as well as to 

ensure uniform treatment across 

institutions. Both agencies use a 1-to-5 

rating scale, with 1 indicating the 

highest rating and least degree of 

supervisory concern, and 5 indicating 

the lowest rating and highest degree of 

supervisory concern. These ratings are 

nonpublic supervisory information and, 

as such, are shared with the institution 

being rated but are otherwise generally 

confidential. 

The OTS rating system for SLHCs is 

known as ‘‘CORE.’’ 9 The Board’s rating 

system for BHCs is known as ‘‘RFI/ 

C(D)’’ 10 (commonly referred to as ‘‘RFI’’). 

Given the similarities between the 

CORE and RFI rating systems, and the 

general goal of rationalizing supervisory 

processes for all institutions, the Board 

is considering transitioning SLHCs to 

the RFI rating system as the Board 

conducts its own independent 

supervisory assessment of the condition 

of the SLHC after the transfer date. The 

Board does not anticipate that any 

existing CORE ratings will be converted 

to RFI ratings until such a review is 

conducted. 

Based on analyses of the CORE and 

RFI rating systems by the agencies, the 

Board believes there is substantial 

overlap between the two rating systems. 

However, there are some areas where 

the CORE and RFI rating systems differ. 

Under the CORE rating system, SLHCs 

generally are assigned individual 

component ratings 11 for capital (C), 

organizational structure (O), risk 

management (R), and earnings (E), as 

well as a composite rating that reflects 

an overall assessment of the holding 

company enterprise as reflected by 

consolidated risk management and 

consolidated financial strength. 

Under the RFI rating system, BHCs 

generally are assigned individual 

component ratings 12 for risk 

management (R), financial condition (F), 

and impact (I) of nondepository entities 

on subsidiary depository institutions. 

The risk management rating is 

supported by individual subcomponent 

ratings for board and senior 

management oversight; policies, 

procedures, and limits; risk monitoring 

and management and information 

systems; and internal controls. The 

financial condition rating is supported 

by individual subcomponent ratings for 

capital adequacy, asset quality, 

earnings, and liquidity. An additional 

component rating is assigned to 

generally reflect the condition of any 

depository institution subsidiaries (D), 

as determined by the primary 

supervisor(s) of those subsidiaries. An 

overall composite rating (C) is assigned 

based on an overall evaluation of a 

BHC’s managerial and financial 

condition and an assessment of 

potential future risk to its subsidiary 

depository institution(s). 

A primary difference between the two 

rating systems is that, unlike the RFI 

rating system, the CORE rating system 

does not explicitly take account of asset 

quality.13 Asset quality is one of a 

number of elements that is taken into 

account in assigning a composite BHC 

rating. However, the Board does not 

believe that assigning a rating for asset 

quality is likely to result in material 

changes to composite ratings because, 

under CORE, a review of asset quality is 


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14Under section 171 of the Dodd-Frank Act, the 

‘‘generally applicable’’ leverage and risk-based 

capital requirements are those established by the 

appropriate Federal banking agencies to apply to 

insured depository institutions under prompt 

corrective action regulations implementing section 

38 of the Federal Deposit Insurance Act. 

15The Basel III text can be found at: http:// 

www.bis.org/publ/bcbs189.htm. 

subsumed into other rating elements (it 

is taken into account indirectly in 

assessing the capital and earnings 

components). 

Additionally, as discussed in more 

detail below, in contrast to BHCs, 

SLHCs currently are not subject to 

regulatory capital requirements. As one 

element of its overall assessment of 

capital adequacy, the (F) component of 

the RFI rating system does take into 

account regulatory capital requirements 

for BHCs. The (C) component of the 

CORE rating system takes into 

consideration both a qualitative and 

quantitative supervisory capital 

assessment that can be found in OTS 

guidance. With the exception of the 

regulatory capital requirement for BHCs, 

the methods used by the agencies to 

determine capital adequacy for purposes 

of establishing a supervisory rating are 

similar. Until such time as consolidated 

capital standards for SLHCs are 

finalized by the Board, the Board 

anticipates that it will assess SLHC 

capital using supervisory quantitative 

and qualitative methods similar to those 

currently employed by the OTS. 

The Board notes that changes to the 

RFI rating system guidance and policies 

may be necessary to accommodate 

SLHCs and differences in their statutory 

and regulatory framework. The Board is 

reviewing this guidance to determine 

where adjustments may be necessary. 

The Board is seeking comment on all 

aspects of this approach. Specifically, 

the Board requests comment with regard 

to: 

1. The burden of these potential 

modifications to supervisory activities 

on SLHCs; and 

2. Whether there are any unique 

characteristics, risks, or specific 

activities of SLHCs that should be taken 

into account when evaluating which 

supervisory program should be applied 

to SLHCs and what changes would be 

required to accommodate these unique 

characteristics. 

Capital Adequacy 

One material difference between the 

OTS and Board supervisory programs 

for holding companies is the assessment 

of capital adequacy. Currently, SLHCs 

are not subject to minimum regulatory 

capital ratio requirements. The OTS 

instead applies both a qualitative and 

quantitative supervisory capital 

assessment to SLHCs that is based in 

guidance. 

Section 171 of the Dodd-Frank Act 

requires that BHCs and SLHCs be 

subject to minimum leverage and riskbased capital requirements that are not 

less than the generally applicable 

leverage and risk-based capital 

requirements applied to depository 

institutions.14 Small BHCs that are 

subject to the Small Bank Holding 

Company Policy Statement (Appendix C 

of 12 CFR part 225) are exempt from 

these requirements. Section 171 of the 

Act did not expressly provide a similar 

exemption for small SLHCs. 

Pursuant to the Dodd-Frank Act and 

the Basel Committee on Banking 

Supervision’s ‘‘Basel III: A global 

regulatory framework for more resilient 

banks and banking systems’’ report 

(‘‘Basel III’’),15 the Board, together with 

the other Federal banking agencies, is 

reviewing consolidated capital 

requirements for all depository 

institutions and their holding 

companies. The Board is considering 

applying to SLHCs the same 

consolidated risk-based and leverage 

capital requirements as BHCs to the 

extent reasonable and feasible taking 

into consideration the unique 

characteristics of SLHCs and the 

requirements of HOLA. The Board, 

together with the other Federal banking 

agencies, expects to issue a notice of 

proposed rulemaking in 2011 that will 

outline how Basel III-based 

requirements will be implemented for 

all institutions, including any relevant 

provisions needed to comply with the 

Dodd-Frank Act. It is expected that the 

Basel III notice of proposed rulemaking 

also would address any proposed 

application of Basel III-based 

requirements to SLHCs. The Board 

expects that final rules establishing 

Basel III-based capital requirements 

would be finalized in 2012 and 

implementation would start in 2013, in 

accordance with the international 

agreement. The Board invites SLHCs to 

monitor and participate in the Basel III 

capital rulemaking process. 

Although the Board believes it is 

important for SLHCs generally to be 

subject to the same consolidated 

leverage and risk-based capital 

requirements as BHCs, it recognizes that 

SLHCs have traditionally been 

permitted to engage in a broad range of 

nonbanking activities that were not 

contemplated when the general leverage 

and risk-based capital requirements for 

BHCs were developed. The Board is 

seeking specific comment with respect 

to any unique characteristics, risks, or 

specific activities of SLHCs the Board 

should take into consideration when 

developing consolidated capital 

requirements for SLHCs based on Basel 

III. What specific provisions, consistent 

with the Dodd-Frank Act, should be 

incorporated in the proposed rule in 

order to address such unique 

characteristics, risks, and/or specific 

activities? Additionally, the Board is 

seeking comment on the following: 

3. What instruments that are currently 

includable in SLHCs’ regulatory capital 

would be either excluded from 

regulatory capital or more strictly 

limited under Basel III? 3(a) How 

prevalent is the issuance of such 

instruments? Please comment on the 

appropriateness of the Basel III 

transitional arrangements for nonqualifying regulatory capital 

instruments. Provide specific examples 

and data to support any proposed 

alternative treatment. 

4. Are the proposed Basel III-based 

transition periods appropriate for 

SLHCs and, if not, what alternative 

transition periods would be appropriate 

and why? 

Finally, the Board is seeking specific 

comment with respect to what methods 

the Board should consider 

implementing for assessing capital 

adequacy for SLHCs during the period 

between the transfer date and 

implementation of consolidated capital 

standards for SLHCs. The Board also 

anticipates providing additional notice 

or issuing specific formal guidance or 

rules with regard to supervisory capital 

assessment after the transfer date and 

providing further opportunity for 

comment. 

By order of the Board of Governors of the 

Federal Reserve System, April 15, 2011. 

Robert deV. Frierson, 

Deputy Secretary of the Board. 

[FR Doc. 2011–9588 Filed 4–21–11; 8:45 am] 

BILLING CODE 6210–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 50 

[EPA–HQ–OAR–2007–0492; FRL–9298–4] 

Release of Final Document Related to 

the Review of the National Ambient Air 

Quality Standards for Particulate 

Matter 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Notice of availability. 

SUMMARY: The Office of Air Quality 

Planning and Standards (OAQPS) of 

EPA is announcing the availability of a 


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